Mr. Schaar, personal data is becoming more and more of a macroeconomic asset, and we are moving towards becoming a data economy. The storage and use of personal data by different interest groups and for a variety of purposes is increasing steadily. The result is the loss of sovereignty over our data. Do you agree?

Peter Schaar: The question as to who has access to our data is becoming ever more important in light of current data collection and processing practices. Contrary to expectations, today's information society is primarily transparent in only one direction like a one-way mirror, with transparent users on one side and largely non-transparent, digital power centres on the other. No society in which ever more data is available at the global level is immune to cultural impoverishment and oppression. For the future of a democratic information society it is vital that the use of information technology is shaped in such a way that the values and rights fought for and obtained over centuries are safeguarded even under rapidly changing technological conditions. These include data protection and transparency in equal measure. As defined by the German Constitutional Court back in 1983 in its ruling on the then contentious issue of the census, data protection is the right to informational self-determination. The free development of personality guaranteed by the German constitution also includes – according to Germany's Constitutional Court – the basic right of every individual to determine the disclosure and appropriation of their personal data. This is even truer today, and technology can certainly help to ensure that this maxim is fulfilled. Unfortunately, it must be noted that many digital business models as well as government supervisory measures have the opposite effect and in fact restrict informational self-determination. Hence, a rethink is urgently required.

From your point of view, what are the economic, political and also societal consequences of these developments?

Peter Schaar: It may sound paradoxical, but transparency can also help strengthen the right to informational self-determination. Moreover, transparency can actually promote democratic mechanisms of participation and co-decision. Even though we don't need complete transparency – which would also give rise to data protection concerns – we need considerably greater insight into procedures, structures and decision-making processes. It would not suffice to create transparency afterwards. It is at least equally important, as a precautionary measure, to create clarity in order to prevent misguided developments in the public and private sectors from the outset. The right to information under data protection law, the right of access to documents under administrative law, and the right to access government information, which are all guaranteed under freedom of information laws, are insufficient. Rather, laws on the freedom of information must be developed further into laws on transparency, under which government bodies are obliged to provide much more information of their own initiative, i.e. pro-actively. What would be desirable is that not only copied documents are made public but also the data used in the decision-making process (open data). The digital economy, too, needs considerably greater transparency, especially in light of the procedures used in individual profiling and the assessment of human behaviour. Many of the people affected will undoubtedly be unable to understand the complex algorithms involved. Disclosure, however, means they are made verifiable by experts, consumers and data protection advocates. Experience with successful open-source projects – such as the Linux operating system – shows that such transparency of algorithms is useful and feasible and that greater transparency even contributes to improvements in software quality, because errors can be identified more quickly. Finally, we need transparency regarding prices and costs in connection with digital business models. Only if we know the value of the data we divulge, we can make a rational decision about whether we want to use services and which ones to use. The internet offers numerous technological resources that are suitable for this purpose.

Critical voices have claimed that, for instance, Apple users are quoted different prices to Android users for the same services or products, because they are presumed to have differing levels of purchasing power. Moreover, there is debate as to whether insurance companies will in future levy different premiums, or even refuse to insure certain individuals, based on personal movement profiles and/or electronic health data. Such price differentiation or the refusal to provide certain insurance products on the basis of our data profiles (of which we are unaware) have been labelled as discrimination by critics. Are these rumours or are consumers actually quoted different prices based on the device we use? How can consumers protect themselves from such discrimination?

Peter Schaar: Irrespective of the examples you mentioned, it cannot be denied that companies are increasingly working on models to individualise and personalise offers and that this also includes price differentiation. I expect we will see not only the rough differentiations you describe but also much more sophisticated methods. Even today, individual interest rates to be paid on a bank loan are already based on scoring models which include a number of parameters. Hence, it is of decisive importance in both retail trade and the services sector to ensure greater transparency. Today every individual already has the right to request information on their personal data. Transparency regarding the creation of profiles, by contrast, is underdeveloped. Citizens and consumers must be much better informed. I consider legislation to that effect to be urgently required.

Price differentiation, as mentioned above, is only one way companies can influence us through the use of personal data on the internet. Guided data acquisition results in every citizen increasingly tending to find their opinions are confirmed. As soon as a user, for example, utilises the results of their Google search, the underlying filtering algorithms produce a personalised selection so that the software vendor or programmer can define exactly which results the user gets to see and which ones they do not. Advertising pop-ups probably harbour less of a risk. However, there is cause for concern if this channel is also used to exert political influence. This holds true not only for Germany but especially for countries lacking a sound democratic and legal footing. What effects do you think are to be expected in the medium to long term of the danger of monopolisation of opinion by means of self-learning algorithms, and what do we citizens have to consider when seeking information online?

Peter Schaar: Already, we are often caught in the filter bubble. We do not really know how search engines collect the results of our search. According to the Google Doctrine, internet democracy is a kind of machine that concentrates a host of information at a company which evaluates and uses it according to algorithms that are not available to the public. The way in which companies handle this data ultimately depends on their economic interests. Rules are laid down unilaterally without user involvement; and neither do users have any influence on the search results presented to them. If they don't like these rules, users have no other choice than to stop utilising the service. The fact that government bodies also deliberately intervene in order to manage information is confirmed by examples from many countries. Even Western democracies are not immune to this, as shown by press reports about the Pentagon's alleged financing of a Facebook study on emotional manipulation. Users with merely superficial knowledge of computer technology stand little chance of protecting themselves against such manipulation. Hence, it is all the more important to make conscious decisions when using the internet and other digital technologies. This includes both the selection of services and data protection configurations. Particularly important, however, is a critical attitude towards information obtained online. In this respect, it is always a good idea to use several sources of information and to form one's own opinion of reality. The internet even facilitates such strategies.

The above-mentioned developments are also resulting in some internet firms in the data protection and data security segment specialising in helping citizens to regain control and sovereignty over their own data. The business models of these firms include cloud-based solutions that allow us to store our personal data securely in order to decide for ourselves whether to make it accessible to only certain people, companies or interest groups. How do you rate the likelihood of success of these – relatively new – business models, and should these offerings also be provided by the public sector? Do you see individuals being able to monetise their personal data themselves in future and what form might such a solution take?

Peter Schaar: Data protection and the guarantee of security and confidentiality of data are of substantial economic significance. The success of corresponding business models depends on a variety of factors: the performance and user-friendliness of the products, their price and of course consumer awareness. For instance, many commercial users have come to realise in recent times that they expose themselves to huge risks if they ignore data protection and IT security. The Snowden revelations have led to a considerable decline in revenues for US cloud services. Ultimately, however, the right legal framework must be in place: companies doing flourishing business in Europe simply cannot be allowed to ignore the EU data protection laws with which their European competitors have to comply. On this issue I'm counting on the imminent reform of EU data protection legislation which is intended, first and foremost, to create a “level playing field” where non-EU vendors have to comply with the local rules and regulations. I am sceptical about the self-monetisation of personal data, as it ultimately increases the volume of personal data that is given away. There is a good reason why German law bans the trade in human organs even though some individuals would be prepared to give their consent. We should not allow our fundamental right to informational self-determination to be bought, even though making money out of our own personal data might appear beneficial from a short-term perspective.

Besides the various internet firms there are also government authorities gathering our personal data and compiling personal movement profiles in order to improve the clear-up rate for criminal cases or to prevent as many terrorist attacks as possible. One aspect being debated is whether an imbalance has already developed between “ensuring public safety” and “exercising control over the public”. Government authorities are storing and evaluating personal data. Where will this practice lead in the medium to long term? To what extent is the state in a position to provide protection if it itself is part of the tracking system?

Peter Schaar: The authorities have jumped on the bandwagon. They demand and frequently obtain access to the data that is generated by digital business models. I am particularly sceptical about measures such as data retention that turn companies into pseudo-sheriffs. All the same, in Germany we have the Federal Constitutional Court and in Europe the European Court of Justice and the European Court of Human Rights, institutions that impose limits on the state's urge to collect data. When democratic states continually ramp up the surveillance of their citizens for perfectly understandable reasons they thereby jeopardise the principles of a democracy in which the rule of law applies. Unfortunately I cannot discern any change of tack by governments on this count.

Let us conclude by speculating about the future. What is your vision of digital-age communication that is secure and unmonitored, and if necessary also anonymous, and what preconditions have to be satisfied so that every user can once again surf the net authentically?

Peter Schaar: One important step could be for encrypted communication to become standard. Without encryption the confidentiality of internet use is at best comparable with that of a postcard. The fact that each internet user can already encrypt their emails does not obviate the need for comprehensive secure solutions. On the one hand, the issue is not merely emails, and on the other, most users feel they cannot cope. That is why the providers have to step in. We need binding standards across multiple platforms. Identification solutions must be tamper-proof but at the same time allow users to remain anonymous or use pseudonyms. Interesting solutions do exist, too. However, they have only been implemented inadequately. In my opinion it is the duty of the data protection authorities to ensure that providers fulfil their legal obligations – at least those that apply in Germany – to enable users of internet services to remain anonymous and use pseudonyms. Without data protection, unmonitored spaces for discussion, information and opinion forming and without the transparency of societal decision-making processes the information society would become a nightmare. From a democratic theory standpoint “there is no alternative” – to use an expression that is often rightly criticised – to taking legal and technical precautions that ensure that individual freedoms and opportunities for political participation are expanded. The possibility of being an anonymous user is an important aspect, but it is not enough by a long way.

Deutsche Bank launches new banking app

The new “Deutsche Bank Mobile” banking app is available from the App Store starting today

Deutsche Bank Mobile is initially available for Apple iPhones 4s to 6s and will also be available for the Android operating system from the third quarter on. It provides access to the Bank’s digital ecosystem and raises the company’s digital profile. Its predecessor, the “My Bank” app, has been downloaded more than 1.5 million times.

Deutsche Bank opens innovation lab in Silicon Valley

Deutsche Bank announced on April 6, 2016 that it has opened an innovation lab in Silicon Valley, with a launch event attended by its Co-Chief Executive John Cryan on Tuesday. The lab in Palo Alto will enable the Bank to evaluate emerging technologies from Silicon Valley and apply them to enhance its products, services and internal processes. It will also further strengthen the Bank’s ability to innovate, while deepening its relationships with start-ups.

The digital revolution is having a beneficial economic effect: new technologies are appearing at a faster rate.

Of course, many of these technologies are still in their infancy and in some cases are still in the visionary stage, but they nevertheless hold unforeseen and lucrative potential. The race for digital technologies and appropriate monetisation strategies has been on for some time, especially among the large internet platforms. In the future, however, digital technologies will also find their way into traditional companies where they will gradually evolve into a comparative competitive advantage. This poses a number of advantages and disadvantages, which we urgently need to discuss.

Deutsche Bank Research: Come on you (digital) inventors and entrepreneurs!

The opportunities provided by digital structural change are being talked up heavily, and the shape they will take over the long term can only be guessed at. Today, everyone can participate interactively in digital spaces as long as they have access to the internet. Flexible and varied relationships are formed between people and their diverse identities in the online and offline worlds. Experimental forms of participation and collaboration will become more important in the medium term, which will continually influence the value creation process in many firms. Digitalisation is thus changing our social and economic lives as well as the way that we interact with one another and how we (have to learn to) handle (personal) data in future.

Deutsche Bank Research: Open data – unrecognised potential

The commercial and data protection foundations for debate about big data may well already be in place. But far removed from the debate about monetisation and data misuse there is another world in which data applications, regardless of their data volumes, can provide a valuable economic benefit to society. Our increasingly digital and data-driven economy enables us to more rapidly detect potential ways to boost efficiency and productivity and subject them to closer scrutiny. In this context, the desire for greater transparency, participation and collaboration provides an important motive for experimenting ultimately in fact with new forms of democratic processes. The initially exponential growth in the volume of data and its intelligent evaluation provide the fertile breeding ground needed for innovation and economic growth in the digital age.

Deutsche Bank Research: Big data – The untamed force

Big data is increasingly becoming a factor in production, market competitiveness and, therefore, growth. Cutting-edge analysis technologies are making inroads into all areas of life and changing our day-to-day existence. Sensor technology, biometric identification and the general trend towards a convergence of information and communication technologies are driving the big data movement.

The forces driving digital structural change are complex, and “predatory competition” is certainly an inadequate description of all the effects it is having on established sectors and structures in their entirety. That is why other aspects are making a fundamental contribution to the change. These include the exponentially rising volume of data, the penetration of web-based devices, popular familiarity with the internet, network effects and economies of scale, broadband expansion, the potential for automation and standardisation, the readiness to adapt and the flexibility of established providers, changes in demand and consumption patterns as well as stricter regulatory measures.

Contrary to what some critics say, traditional banks would be well advised to start using digital and algorithm-based data analysis instruments now. In future, this will be the only way they can offer their customers personalised financial services and recommendations and continually optimise their internal processes. Should they hesitate, however, the technology-driven, non-bank market newcomers will continue to extend their information lead and in time begin to offer more financial services (also outside the retail banking segment) that are easy to standardise and automate. The latter would further intensify cut-throat competition in the financial industry and could reduce traditional banks in the case of some financial services to pure-play infrastructure providers with declining customer contact. The introduction of so-called recommendation algorithms should be accompanied by the mandatory consent of the customer and transparent communication on how they function.

Group Chief Operating Officer Kim Hammonds opens new Dublin data lab

Deutsche Bank opened a data lab in Dublin that will create 40 new jobs. It also announced plans to create a further 125 Technology and Operations roles in Dublin supporting its Global Markets and Corporate & Investment Banking divisions.

Many of the things that had us gasping in amazement when we watched science fiction films just a few decades ago have now become a mass-market reality. Today, Hollywood shows us what we can expect if we continue to develop digital technologies at the current pace. Of course, artificial intelligence and its use in all areas of our lives are undoubtedly still a long way off. However, substantial progress is being made especially when it comes to pattern recognition, modern data analysis and the use of self-learning algorithms. Without this technological progress, we would no longer be able to cope with the exponential growth in data volumes and data potential of which we can still only begin to conceive. We need the machines.

Deutsche Bank opens its data store to external software developers

Deutsche Bank is giving ambitious software developers from Germany and abroad the opportunity to create digital solutions for bank clients that go far beyond traditional financial services. The address developer.db.com provides access to the Bank's proprietary development environment, allowing programmers to test their ideas for digital services of the future. Deutsche Bank has opened an application programming interface, dbAPI, specifically for this purpose.

Deutsche Bank DigitalBanking: Chapter four

Access to data anywhere, any time – and for anyone?

Sharing, networking and maximum flexibility – these are central to the dream of a digital society. But however much we enjoy new-found freedom, it can still make us a little uneasy at times. It is about our personal information after all – and about our money.

Imagine you use a digital wallet. What are your biggest concerns?

Arrange the 3 aspects below according to their importance to you.

If someone steals my smartphone, they have access to all of my personal data.

7 questions for Peter Schaar

The former Federal Commissioner for Data Protection and Freedom of Information (BfDI) answers our questions on data protection, spy software, discrimination and the monopolisation of public opinion.

Photo: dpa

1 of 7: One-sided transparency

“Contrary to expectations, today’s information society is primarily transparent in only one direction like a one-way mirror, with transparent users on one side and largely non-transparent, digital power centres on the other.”

“Transparency can promote democratic mechanisms of participation and co-decision. We need considerably greater insight into procedures, structures and decision-making processes.”

3 of 7: Guided data acquisition and monopolisation of public opinion

“Rules are laid down unilaterally without user involvement; and neither do users have any influence on the search results presented to them. Users with merely superficial knowledge of computer technology stand little chance of protecting themselves against such manipulation.”

5 of 7: Data protection and data sovereignty

“Companies doing flourishing business in Europe simply cannot be allowed to ignore the EU data protection laws with which their European competitors have to comply.”

6 of 7: Evaluation of data by government authorities

“When democratic states continually ramp up the surveillance of their citizens for perfectly understandable reasons they thereby jeopardise the principles of a democracy in which the rule of law applies.”

7 of 7: The age of the information society

“Without data protection, unmonitored spaces for discussion, information and opinion forming and without the transparency of societal decision-making processes the information society would become a nightmare.”

JP Rangaswami

“Banking will always be about trust and data is at the core of that trust.“

The bank's Chief Data Officer explains how huge amounts of data can be managed in such a way that clients get exactly the information that really matters to them: “We learn the patterns and then we decide how to make use of those patterns to serve the customer.”

Digital society, banking of the future, setting up a business and data security in a digitalised world: here you will find what Deutsche Bank can offer – from research to services.